BMI View: The removal of economic sanctions heralds an era of uncertainty for Iran's pharmaceutical market. Underlying issues regarding the operating environment will prevent an immediate uptick in multinational drugmaker interest; rather , this will be a gradual process. Nevertheless, there has been a notable boost in international cooperation with European counterparts in particular over the past six months. T his will support the Iranian government's aim to attract greater direct investment from foreign pharmaceutical companies.
Headline Expenditure Projections
Pharmaceuticals: IRR69.55trn (USD1.93bn) in 2015 to IRR79.49trn (USD1.99bn) in 2016; +14.3% in local currency terms and +2.9% in US dollar terms. Forecast down graded from p revious quarter.
Healthcare: IRR800.60trn (USD22.24bn) in 2015 to IRR900.81trn (USD22.52bn) in 2016; +12.5% in local currency terms and +1.3% in US dollar terms. Forecast up graded from previous quarter .
|f = BMI forecast. Source: World Health Organization, UN Comtrade, National sources, BMI|
|Pharmaceutical sales, USDbn||1.910||1.930||1.990||2.360||2.460||2.680||2.910|
|Pharmaceutical sales, % of GDP||0.45||0.44||0.60||0.59||0.58||0.57||0.57|
|Pharmaceutical sales, % of health expenditure||8.5||8.7||8.8||9.0||9.1||9.3||9.4|
|Health spending, USDbn||22.360||22.240||22.520||26.280||27.020||28.890||30.910|
Iran scores 40.4 out of 100 in terms of its attractiveness as a destination to launch innovative pharmaceuticals in Q416, maintaining its score from the previous quarter, according to BMI's Risk/Reward Index. Iran's position in the index remains stationary at 15th out of 31 countries in the Middle East and Africa region. Its overall score currently sits exactly at the regional average of 40.4.
Generally speaking, Iran benefits from a large and growing population and relatively widespread access to healthcare services. However, its regulatory regime - including intellectual property rights and economic situation - is highly questionable. Consequently, the country performs below the regional average in terms of risk despite improvements in the political situation.
In August 2016, Vice President for Science and Technology Sorena Sattari announced plans for Iran to commence the exporting of pharmaceuticals to Europe. The plan comes both as a result of Iran's ability of satisfying almost all internal demand with domestic production (98%) and greater opportunities for trade post-sanctions.
In August 2016, Iranian and Swedish government representatives met to discuss expanding economic cooperation, particularly in the areas of pharmaceutical industries and medical equipment and infrastructure. As part of the negotiations, officials from both sides agreed to examine the feasibility of a joint construction hospital project in Tehran.
BMI Economic View
Iran's banking sector is entering the most sanguine operating environment for several years following the removal of sanctions which will offer much-needed respite as economic growth picks up and the government gains access to USD40-50bn in frozen assets, as well as returning access to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) transactions. We forecast economic growth to pick up from 0.4% in FY2015 (fiscal year running from March 21 2014 to March 20 2015) to 5.1% by FY2017.
BMI Political View
Consumer price inflation in Iran will continue to reach new lows as the removal of sanctions and slower depreciation of the rial take hold and the impact of subsidy cuts wear off. This will result in increasing popularity for President Rouhani, bolstering his position ahead of elections in June 2017 which we expect him to win.
The Iran Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Iran Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Iran pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Iran, to test other views - a key input for successful budgeting and strategic business planning in the Iranian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Iranian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Iran.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.